for personal use only - asx · 11/23/2016 · (i) marketscope: “2016 china ophthalmic market...
Post on 23-Jul-2020
3 Views
Preview:
TRANSCRIPT
Slide 1
ANNUAL GENERAL MEETING23 NOVEMBER 2016
ANNUAL GENERAL MEETING23 NOVEMBER 2016ELLEX MEDICAL LASERS LTD (ASX:ELX)ELLEX MEDICAL LASERS LTD (ASX:ELX)
For
per
sona
l use
onl
y
Slide 2
ABOUT ELLEX
Ellex designs, manufactures and sells world-leading medical devices for the treatment of eye disease.
For
per
sona
l use
onl
y
Slide 3
DISCLAIMERThis presentation has been prepared by Ellex Medical Lasers Ltd (Ellex).
While the information in this presentation has been prepared in good faith and with reasonable care, no representation or warranty,express or implied, is made as to the accuracy, adequacy or reliability of any statement, estimates, opinions or other informationcontained in the presentation.
This presentation may contain forward looking statement. These forward-looking statement have been made based upon Ellex’sexpectations and beliefs concerning future developments and their potential effect on Ellex (and it’s controlled entities) and aresubject to risks and uncertainty which are, in many instances, beyond Ellex’s control. No assurance is given that futuredevelopments will be in accordance with Ellex’s expectations. Actual results could differ materially from those expected by Ellex.
This presentation does not constitute an offer to sell or a solicitation of an offer to purchase any security or financial product orservice. Any such offer or solicitation shall be made only pursuant to a Product Disclosure Statement, Information Memorandum,Prospectus or other offer document relating to a financial product or service.
Past performance is not necessarily indicative of future results and no person guarantees the performance of any financial productor service or the amount or timing of any return from it. There can be no assurance that the financial product or service will achieveany targeted return, that asset allocations will be met or that the financial product or service will be able to implement its investmentstrategy and investment approach or achieve its investment objective.
The information contained in this presentation is not intended to be relied upon as advice to investors or potential investors, whoshould consider seeking independent professional advice depending upon their specific investment objectives, financial situation orparticular needs.
For
per
sona
l use
onl
y
Slide 4
ELLEX SUMMARY• Fourth consecutive year of improvement in sales and profit.
• Ellex is a leading global brand that is trusted in the traditional laser and ultrasound market.
• We are leveraging Ellex brand into two new market segments:
• the fast growing market for minimally invasive glaucoma surgery (MIGS) and;
• the emerging market for treating early stage age related macular degeneration (AMD).
• Each of these markets is substantially larger than the traditional ophthalmic laser and ultrasound market.
For
per
sona
l use
onl
y
Slide 5
GLOBAL MARKET FOR TREATING THE FOUR LEADING CAUSES OF BLINDNESS
• 25.3m cataract
operations per year• 122m people
• 107m people
• 82m people
GLAUCOMAUS $4.6bn
RETINALDISEASEUS $1.9bn
CATARACTUS $3.3bn
EARLY AMDUS $5.1bn
For
per
sona
l use
onl
y
Slide 6
ELLEX – INCREASING REVENUE & PROFIT
80706050403020100 FY15FY15 FY16FY16FY14FY14FY13FY13
REVENUE ($AUD million)REVENUE ($AUD million)
9
0 FY15FY15 FY16FY16FY14FY14FY13FY13
EBITDA ($AUD million)EBITDA ($AUD million)
AUD
mill
ion
• Sales have grown at a CAGR of 15% over 4 years• Profit has grown both in absolute and percentage terms
For
per
sona
l use
onl
y
Slide 7
FINANCIAL SUMMARY – SALES BY REGION
FY13 FY14 FY15 FY16 Change
USA 8.5 17.9 20.5 25.9 +26%
Asia 3.2 3.9 4.4 8.7 +98%
Japan 10.7 10.4 8.4 10.8 +29%
EMEA 10.0 11.4 15.4 17.1 +11%
South America 0.9 1.4 2.2 2.0 -10%
Australia 9.5 9.4 11.8 8.4 -28%
TOTAL 42.8 54.4 62.7 72.9 +16%
Recurring Ellex-branded consumables & service component (% of total)
4.7(9%)
8.3(13%)
9.9(14%)
10.7(15%)
• Growth of iTrack™ (29% constant currency growth)• Improved sales of new products
• Improved sales of new products• Some iTrack™ growth
• New products, new sales management structure
• Low world oil prices have impacted demand
• Primarily includes discontinued low-margin contract manufacturing
• Growth in China
CAGR of revenue FY13 to FY16 is 15%
For
per
sona
l use
onl
y
Slide 8
15%JapanDirect Sales Subsidiary, Tokyo
12% AsiaDistributor Sales
18%EMEADistributor Sales, Lyon
2%FranceDirect Sales
Lyon Ellex Customer Service Center and France Sales Subsidiary
36% North AmericaMinneapolis, MNUS Direct Sales SubsidiaryFremont, CAiTrack Manufacturing
5%GermanyDirect Sales Subsidiary, Berlin
3% South AmericaDistributor Sales
9%AustraliaDirect Sales
Adelaide, AustraliaCorporate Head OfficeManufacturingAsia Customer Support
ELLEX REVENUE BY TERRITORY
For
per
sona
l use
onl
y
Slide 9
FINANCIAL SUMMARY – BALANCE SHEETASSETS 30 June 15 30 June 16
Cash 4.6 7.3
Trade receivables 12.5 15.7
Inventories 16.3 19.2
Product development capitalised 10.7 11.6
Deferred tax asset 5.8 5.3
PPE, Ellex iTrack™ deferred consideration and other assets 9.1 9.4
Land and buildings - 4.0
Total Assets 59.0 72.5
• Net debt (all trade and mortgage borrowings less cash) of $0.9m compared with $2.2m at 30 June 2015.
• Net cash (cash less trade borrowings) of $1.1m at 30 June 2016.
• Inventory growth to support higher sales evidenced by constant stock turn ratio.
• Deferred US$ consideration on Ellex iTrack™ falls as payments made but rises as A$ depreciates.
• Purchase of land and buildings at Mawson Lakes, South Australia and fitout in progress. Being funded with mortgage debt and cash reserves.
LIABILITIES 30 June 15 30 June 16
Trade creditors 5.8 8.3
Borrowings – mortgage - 2.1
Borrowings – trade 6.8 6.1
Deferred consideration 3.4 3.3
Provisions + Other 3.2 4.0
Total Liabilities 19.2 23.8For
per
sona
l use
onl
y
Slide 10
FINANCIAL SUMMARY –FREE CASH FLOW FROM OPERATIONS
• Reduction in operating cash flow compared with pcp reflects high sales in June 2016 compared with June 2015 and the need to increase raw materials to support increase in production.
• Production levels from the Adelaide facility in the three months ended 30 June 2016 were 75% higher than production levels during the same time in 2015 (50% higher in H2 FY16, compared with H2 FY15).
CASH FLOWS FY13A$m
FY14A$m
FY15A$m
FY16A$m
Operating Cash Flows 1.9 2.7 6.9 5.2
Investing - PP&E (0.6) (0.6) (1.9) (1.5)
Cap. Development Costs (2.2) (2.1) (2.3) (2.8)
Net free cash flow (FCF) from operations (0.9) (0.5) 2.7 0.9
Acquisition of iTrack™
business and earn out payments
- (1.6) (0.6) (0.7)
Purchase of land & buildings for increased production - - - (3.8)
Debt (repayments) /proceeds (0.8) (1.4) 1.0 1.5
Proceeds of share issue - 5.9 - 4.7
Net Cash Flow (1.7) 2.4 3.1 2.6
For
per
sona
l use
onl
y
Slide 11
FY16 Highlights • New retinal products
registered in USA, Japan.
• New cataract and vitreous opacities product launched in China & Japan.
• Continued growth of Ellex iTrack™
• Increase in SLT competition in all markets limited growth
REVENUE BY DISEASE HIGHLIGHTS GROWTH OPPORTUNITIES
Core Ophthalmic Market Fast Growing Emerging
For
per
sona
l use
onl
y
Slide 12
CORE OPHTHALMIC MARKET
.
Ophthalmic Lasers and UltrasoundGenerated 90% of FY16 revenue
.
• Market segment is approx. US$350m/annum• Growing with aging population and new emerging markets (like China)• Ellex is a global leader in this segment with increasing market share• Ellex growing at higher than market rate because of continued investment
in innovation and marketing of new treatments (like floaters)• Business model is capital equipment sales
For
per
sona
l use
onl
y
Slide 13
GROWTH BY LEVERAGING ELLEX BRAND INTO FAST GROWING & EMERGING MARKETS
Glaucoma MIGS Market with Ellex iTrack ™
Ellex iTrack generated 8% of FY16 revenue
Ellex 2RT™ treatment for Macular Degeneration (AMD)2RT™ generated 2% of FY16 revenues
• Fast moving market segment circa US$100m growing at 44% CAGR to $700m by 2020• Patent-protected, unique treatment device with high clinical efficacy• Ellex iTrack™ relaunched during FY16 and 29% sales growth achieved in USA• FDA approved, CE marked for Europe, approved in China• No. 2 in US market• Consumable recurring revenue business model
• Emerging market for early AMD treatment• $5bn currently spent annually on pharma for late stage disease management• Ellex 2RT™ treatment, patent-protected with significant lead on competition• Ellex 2RT™ may defer need for expensive, invasive pharma• Per-use recurring fee business model
For
per
sona
l use
onl
y
Slide 14
LEADING PRODUCTS IN CORE OPHTHLAMIC LASER & ULTRASOUND MARKET
For
per
sona
l use
onl
y
Slide 15
(i) Marketscope: “2016 China Ophthalmic Market Report” March 2016
OPHTHALMIC LASER & ULTRASOUND - GROWTH IN CHINA
• The current spend in China for the treatment of eye disease is US$2.7 billion per annum – and this is expected to grow to US$5.3 billion by 2021 (CAGR 15%) (1).
• Demand in China primarily relates to new hospital fit-out and can be unpredictable
• Ellex is undertaking investment in FY17 to improve in-country presence.
AUD
mill
ion
FINANCIAL YEAR
10
0FY15FY15 FY16FY16FY14FY14FY13FY13
ELLEX REVENUE IN CHINA (AU$)ELLEX REVENUE IN CHINA (AU$)
98%growth
For
per
sona
l use
onl
y
Slide 16
PRODUCTION CAPACITY EXPANSION UPDATE
Work completed:• New site at Mawson Lakes 15km north of Adelaide CBD acquired in March 2016• Building of approx. 5,500sqm doubles production floor area• Site area of 22,000sqm will provide future expansion potential• Production process validation and verification in progress
Work to complete:• Finalisation of validation of production processes at new site• Audit and qualification of Mawson Lakes by Therapeutic Goods Administration (TGA)• Completion of move expected by end of March 2017
For
per
sona
l use
onl
y
Slide 17
FAST-GROWING MIGS MARKET – ELLEX iTRACK™
• Acquired in January 2014 and relaunched in FY16 as MIGS procedure as new surgical procedure “ab-internocanaloplasty” (ABiC™)
• ABiC™ is a fast, simple surgical procedure using Ellex iTrack™
single use catheter device for “angioplasty” of the eye on patients with glaucoma
• Ellex iTrack™ differs from competitor MIGS because it treats 360° of Schlemm’s canal, rather than the insertion of a single point stent (canal bypass)
For
per
sona
l use
onl
y
Slide 18
ELLEX iTRACK™ IN FAST-GROWING MIGS MARKETKey activities and milestones:JANUARY 2014Acquired from Menlo Park based company iScience. The patented iTrack™ catheter for angioplasty for the eye, known as canaloplasty
JULY 2014Ellex introduced a simple surgical procedure,named ab interno Canaloplasty (ABiC™), with Ellex iTrack™ and commenced trials
OCTOBER 2015Promising 6 month clinical results of ABiC™
presented at US conference triggered limited commercial roll-out in US market with dedicated sales team
MAY 2016Excellent 12 month clinical results confirm clinical efficacy and confidence to invest in market development
JUNE 2016Growth in US market revenue of 29% reported directly attributable to new ABiC™ procedure. Total sales of A$6.1m
SEPTEMBER 2016Appointment of Senior Ophthalmic sales manager to lead global expansion of ABiC™ with Ellex iTrack™ .
OCTOBER 2016Successfully obtained lift in US reimbursement effective 1 Jan 2017.
JANUARY 2017Strong growth expected in USA market following reimbursement uplift and sales team expansion
For
per
sona
l use
onl
y
Slide 19
ELLEX iTRACK™ VALUATION POTENTIAL• Measured by revenue the Ellex iTrack™ is currently the number 2 MIGS device
in the world
• Dominant participant in the MIGS market is Glaukos (GKOS:NYSE) with its iStent ™ product
• GKOS has current revenues from iStent ™ of approximately US$100m per annum and has a market capitalisation on the NYSE of approximately US$1.0 billion
• Allergan also purchased (in 2015) a MIGS device for glaucoma treatment from Aquesys for approximately US$300m. This device does not yet have FDA approval.
• Alcon recently purchased a MIGS device for glaucoma treatment from Transcend Medical for approximately US$200m. Obtained FDA approval in August 2016.
For
per
sona
l use
onl
y
Slide 20
• AMD (“Age-Related Macular Degeneration”):a. leading cause of blindness in the developed worldb. affects one in seven Australians over the age of 50
(Source: Macular Disease Foundation, Access Economics).
• AMD is estimated to directly cost the Australian community more than AU$2.6 billion annually (Source: CERA Centre for Eye Research Australia).
• UNMET NEED: late stage AMD is treated with 6 weekly injections of drugs directly into a patient’s eye. This preserves vision but is:
a. onerous on patients and caregivers, and;b. burden for government health schemes to purchase
the drugs
ELLEX 2RT™ FOR EARLY AMD
2RT™ LASER
For
per
sona
l use
onl
y
Slide 21
ELLEX 2RT™ MAY DELAY LATE-STAGE AMD PROGRESSION
Health of retina &
macula
Time in yearst1 75 years of age
injection in eye
requiring anti-VEGF injection into eye to prevent immediate
blindness
disease progression
without Ellex 2RT™defer injection in eye
good/normal
Ellex 2RT™ may slow disease progression
Apply the Ellex 2RT™
nanopulse laser light therapy
indication of retinal health failing shown in retinal photo
detection
For
per
sona
l use
onl
y
Slide 22
ELLEX 2RT™ FOR EARLY AMD
• Total pharma spend $5bn per annum globally indicates the importance of disease treatment to health care systems
• Currently there are 122m people with early stage macular degeneration receiving treatment
• Ellex 2RT is patent protected device that is significantly ahead of any other competitor
• Ellex 2RT fits well into existing Ellex distribution channel• There are presently no alternative therapies• Ellex 2RT is expected to contribute significantly to growth in FY19 and beyond after
completion of clinical trial laser intervention in early age related macular degeneration (LEAD) trial which will report in mid 2018
For
per
sona
l use
onl
y
Slide 23
OUTLOOK FOR FY17
1. CORE OPHTHALMIC LASER & ULTRASOUND:Sales for the first half FY17 will be dependent on our ability to meet demand with finished product from our factory, which is in transition to the new manufacturing site, and timing of significant orders from China. We remain very positive on the demand in the current fiscal year and the long term demand outlook for Ellex ophthalmic lasers and ultrasound.
1. CORE OPHTHALMIC LASER & ULTRASOUND:Sales for the first half FY17 will be dependent on our ability to meet demand with finished product from our factory, which is in transition to the new manufacturing site, and timing of significant orders from China. We remain very positive on the demand in the current fiscal year and the long term demand outlook for Ellex ophthalmic lasers and ultrasound.
For
per
sona
l use
onl
y
Slide 24
OUTLOOK FOR FY17
2. MIGS/ ELLEX iTRACK™:The sales growth rate over the FY16 financial year for our iTrack™ device has been accelerating since 1 July 2016 to mid November 2016 and is up on the growth rate over the same period last year. We believe that our additional sales management, the addition of more sales representatives in the USA and the lift in reimbursement will accelerate sales further in FY17.
2. MIGS/ ELLEX iTRACK™:The sales growth rate over the FY16 financial year for our iTrack™ device has been accelerating since 1 July 2016 to mid November 2016 and is up on the growth rate over the same period last year. We believe that our additional sales management, the addition of more sales representatives in the USA and the lift in reimbursement will accelerate sales further in FY17.
3. ELLEX 2RT™ :The emphasis of Ellex 2RT™ program this year is one-on-one marketing to early adopters in Europe, Australia & New Zealand. This will generate sales at similar levels to FY15 and FY16. Ellex 2RT ™ sales take up will be ultimately dependent on the clinical trial results expected in mid 2018. Investment in clinical trials, KOL development and marketing this unique potential therapy will continue through FY17 & FY18.
3. ELLEX 2RT™ :The emphasis of Ellex 2RT™ program this year is one-on-one marketing to early adopters in Europe, Australia & New Zealand. This will generate sales at similar levels to FY15 and FY16. Ellex 2RT ™ sales take up will be ultimately dependent on the clinical trial results expected in mid 2018. Investment in clinical trials, KOL development and marketing this unique potential therapy will continue through FY17 & FY18.
For
per
sona
l use
onl
y
Slide 25
THANK YOU
For
per
sona
l use
onl
y
top related